DailyPlay – Opening Trade (ZM) & Video update on NVDA position – May 14, 2025

ZM Bullish Opening Trade Signal

Investment Rationale

Zoom Communications (ZM) is entering a period of renewed investor interest ahead of its upcoming earnings release on Wednesday, May 21st, after the close. After a prolonged consolidation, the stock has reasserted strength, breaking above key resistance levels and reclaiming long-term moving averages. With sentiment turning bullish and volatility likely to build into earnings, ZM offers an attractive setup for a directional play. This trade targets a continuation of momentum and potentially elevated premiums into the event, capitalizing on a favorable technical and fundamental backdrop.

ZM has recently broken out of a multi-month consolidation range, clearing resistance near the $78–$80 zone with conviction. The stock is now trading above both its 50-day and 200-day moving averages, reinforcing the bullish momentum. Volume has been strong, reinforcing the breakout’s momentum.  With relative strength registering 9/10 and outperforming the S&P 500, the path of least resistance appears higher, with the next technical target near the $88 level, representing a retest of prior highs from earlier this year.

Despite modest growth forecasts, Zoom trades at a compelling valuation discount relative to its software peers, supported by best-in-class profitability. These fundamentals enhance the risk/reward for a bullish setup into earnings.

• Forward PE Ratio: 15.02x vs. Industry Median 26.17x
• Expected EPS Growth: 1.18% vs. Industry Median 12.54%
• Expected Revenue Growth: 3.27% vs. Industry Median 9.67%
• Net Margins: 21.65% vs. Industry Median 10.19%

Initiate a long call position by Buying 1 ZM Jun 13, 2025, 80 Call, with 31 days to expiration. The trade is slightly in-the-money, offering high delta exposure to further upside while also benefiting from potential IV expansion ahead of earnings. The max risk is limited to the premium paid, while reward is theoretically unlimited. If the stock moves higher and delivers a solid gain prior to May 21st, we will exit the position. If momentum stalls, we may sell an OTM call to form a bull call spread, reducing exposure while retaining upside potential into earnings.

ZM – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 3 ZM June 13 $80 Calls @ $5.98 Debit per Contract.

Total Risk: This trade has a max risk of $1,794 (3 Contract x $598) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $598 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 80

Stop Loss: @ $2.99 (50% loss of premium)

View ZM Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View ZM Trade